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Economy

Graham Lovatt – Tips to survive a recession

With a distinguished 40-year career in industry, encompassing 16 years’ at the helm of two of Europe’s leading forktruck manufacturers, Graham Lovatt has successfully weathered many recessions.

The recently retired industry leader talks to eureka about the important lessons of the recent crisis.

Graham Lovatt

This recession has presented a massive challenge in many ways.

“Firstly, I think it is fair to say it caught everybody by surprise and turned out to be unique in terms of the speed and depth of its impact. Secondly the recovery path is proving particularly difficult to predict. Hope and reality are continuously separated by a large chasm”.

“Over the last 15 years, we have enjoyed the benefits of globalisation resulting in a prolonged period of growth. In my early days in the lift truck industry the economic cycles were more frequent and I guess this created a generation of managers who at least had some background in recession management when this one hit. Even with all this experience the current recession has been particularly testing and it must have been particularly challenging for those managers facing their first recession”.

The complexities of what caused this economic crisis are well documented if still not fully understood. But how has this impacted on the industrial lift truck market and what changes could it bring for Cat lift truck dealers?

“Even before this recession, end users were buying much more than the Cat product from their lift truck dealers. The product, its quality, reputation, technology, is essential of course; but customers are looking for much more than this”.

“Now, even more, they are looking for partners that can help them improve their operational efficiency and thereby contribute to their company objectives. So the services that support the product today have more impact in the ultimate buying decision. This includes the quality, flexibility and innovation in financial solutions, service and rental contracts, spare parts supply, and the provision of value-added services such as fleet audits and recommendations and fleet management programmes”.

Lovatt believes, that in the aftermath of the recession, during which downsizing has become the norm, end users will be increasingly looking for tangible evidence that their suppliers can deliver on their promises. “This boils down to a few fundamental business capabilities: do suppliers have the people, competencies, capacity, financial strength and structure to meet their demands and expectations in the increasingly competitive, post-recession markets?”

"Services that support the product are very important in the buying decision"

The depth and scope of the change that the crisis has precipitated, certainly galvanises customers and industries to react and adapt. Lovatt sees three key trends resulting from the crisis: “The complex nature of this crisis means that for the first time in living history no one can truly predict the speed and rate of any recovery”.

“The experience of the last year has tended to make businesses focus on the short term. This could well accelerate the shift towards rental. In some European countries, long-term rental represents as little as 35 per cent of the market; rental provides end users with options and solutions which can help them manage business risks in times of uncertainty without large one time impacts on their cash flow, whilst at the same time allowing them to renew their equipment fleets”.

“Many end user organisations have experienced downsizing as a result of the recession. There is little doubt that this will result in even greater reliance on suppliers and even higher demands for support, we will be expected to raise our game. It is my opinion that our industry already offers high levels of service and has the structure and discipline to the raise the bar even higher.”

Graham Lovatt’s tips for thriving out of recession

Check that your service providers can deliver on their promises – have clear evidence and measures

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